Risk-off dominated in the Asian session. The safe haven US Dollar and Japanese Yen rose whilst risk sensitive Australian and New Zealand Dollars declined along, with stocks and cyclical commodities such as copper and crude oil. Gold prices edged lower as the Greenback climbed.

The People’s Bank of China’s unexpected move to drain CNY78 billion (USD12 billion) from the banking system via open market operations unnerved investors.

A possible delay of US President Joe Biden’s USD1.9 trillion stimulus package until mid-March may have added to the downbeat mood. Meanwhile the Republicans could raise questions over the size of the US stimulus package.

Later, the IMF will release its latest World Economic Outlook. A downgrade of global GDP forecasts could be on the cards amid a recent slowdown in activity amid tighter lockdown restrictions.

US consumer confidence is due to be released later but is expected to remain broadly unchanged in January after falling in the past two months. Recent US data has been downbeat.